27th Jan 2015 10:58
LONDON (Alliance News) - Volga Gas PLC on Tuesday said it has taken itself off the auction block after failing to attract any acceptable offers, and said it expects its costs to come down in line with a decline in revenue.
The company said its formal sale process, announced in June, has now been withdrawn. It said it received a number of proposals from potential suitors, but none it considered to represent fair value to its shareholders.
Volga said it has a robust balance sheet with no debt and is confident it will be able to operate profitably, despite the downturn in oil prices and the deterioration of economic conditions in its Russian market.
The company said its group production for the year to December 31 was 4,244 barrels of oil equivalent per day, with steady production at its Vostochny Makarovskoye field offset by plant maintenance which resulted in downtime in October and December.
The group said the decline in oil prices in the latter part of 2014 has been accompanied by a depreciation in the value of the Russian rouble against the US dollar, meaning that while its revenue has declined, a major portion of its costs denominated in roubles have decline commensurate with the revenue fall.
Volga shares dropped 18% to 62.00 pence mid-morning on Tuesday, one of the worst performers in the AIM All-Share.
By Sam Unsted; [email protected]; @SamUAtAlliance
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